Business

12 groups respond to state feelers on venture capital program

Twelve groups have shown interest in a state-funded venture capital program, according to documents released Thursday by the agency Gov. Scott Walker directed to explore ideas for an angel and venture capital plan.

The groups responded to a request for information by the Wisconsin Economic Development Corp. They all discussed what type of interest they might have in participating in an investment capital program.

The agency released all of the applications in response to an inquiry by the Milwaukee Journal Sentinel under the state open records law.

Among the 12 respondents were: Credit Suisse Customized Fund Investment Corp., which manages $29 billion of client commitments and is in the process of divesting the business that provided the information; a group formed by Wisconsin Capital Partners, which is run by Lorrie Heinemann, former cabinet secretary for the state Department of Financial Institutions; and the Hispanic Chamber of Commerce of Wisconsin, which is vying to allocate money to venture capital funds based on the experience of unnamed "corporate partners."

Nine responses came from groups affiliated with someone in Wisconsin. Two came from New York: Credit Suisse and Great Oaks Venture Capital, which recently led a funding round for StudyBlue Inc., a Madison educational technology company. One respondent, Hamilton Lane, is from Pennsylvania.

The list showed that big names in the venture capital world as well as homegrown firms were taking a serious look at the state and its proposal, said Tom Still, president of the Wisconsin Technology Council. Although some of the companies might not ultimately participate, new ones might turn up if the state moves forward with a program, he said.

"It shows that some major national players have taken an interest in what's happening in Wisconsin and have an interest in being here, and at the same time, some (in-state) firms are also interested," Still said. "It's a strong initial mix."

WEDC put out the request for information in an effort to identify potential fund managers and learn about the current investment climate in the state. Walker has been considering putting what he calls a capital formation program into the budget he will present to legislators next month.

He has said that the program would probably need a "bare minimum" of a $25 million to $30 million state investment to be viable.

Walker proposed similar legislation in 2011 but it died after disagreement among politicians and special-interest groups about how much money the state would invest in venture capital; which organizations the money would be allocated to; and the types of funds and measures that would be used.

That $400 million bill was bogged down by the inclusion of a provision to give $200 million to out-of-state financial firms known as certified capital companies, or CAPCOs. The CAPCOs sparked controversy because of questions about their performance under a previous state program that began in 1999.

About Kathleen Gallagher

About Jason Stein

Jason Stein covers the state Capitol and is the author with his colleague Patrick Marley of "More than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin." His work has been recognized by journalism groups such as the American Society of News Editors, the Society of American Business Editors and Writers, and the Association of Capitol Reporters and Editors.